NFIB Battles Swipe Fees
Although thousands of businesses accept the use of credit cards, and while consumers embrace the convenience of purchasing with credit cards, their use is often a costly transaction for both consumers and businesses.
Each time a credit card is “swiped” for a sale, a fee is assessed by the credit card company for the use of that card.
Swipe fees in America, among the highest in the world, have tripled since 2004, are seven times the average European rate, and four times higher than comparable fees assessed in Australia.
Swipe fees continue to increase and are now among the largest expenses for most retailers, second only to the cost of labor.
Retailers are allowed a small allowance as compensation to collect and remit the sales tax to the Department of Revenue, but credit card companies assess a fee, paid by retailers, on the total amount of the sales transaction.
While acting as a tax collector on behalf of the Department of Revenue is a costly burden for small retailers, credit card companies make matters worse by applying the swipe fee to the tax portion of the sales, costing retailers millions of dollars but unfairly sending additional revenue to credit card companies.
Senate Bill 572, introduced by Senator Dan Feyen (Fond du Lac), and Assembly Bill 587, introduced by Representative Tyler Vorpagel (Plymouth), would prohibit a swipe fee from being imposed on the tax portion of a transaction when a purchase is made from a merchant using a credit card.
Senate Bill 572 has been referred to Senate Committee on Financial Institutions and Revenue, and Assembly Bill 587 is being reviewed by the Assembly Committee on Financial Institutions.
According to the authors of the proposal, “Wisconsin’s Main Street retailers are losing money while the credit card companies profit on the collection of taxes.”
NFIB supports passage of these proposals which would save small business owners millions of dollars in credit card fees.
NFIB members are urged to contact their elected officials to request support for passage of SB 572 and AB 587.
